McDonald’s signals Kenya entry with franchise call


A sign outside of a McDonald’s outlet on in San Rafael, California. PHOTO | AFP

Globally renowned fast-food chain McDonald’s has invited investors to put in applications for a Kenya franchise, sending out the strongest signal yet of its plans to open shop in Nairobi.

McDonald’s says it is looking for investors who have retail experience and “willingness to devote full time to the McDonald’s restaurant business, knowledge of the real estate market (and) significant capital”.

“We will retain all information sent to us in a database and give you consideration if we take steps to develop McDonald’s restaurants in Kenya,” says McDonald’s in the statement.

The restaurant chain’s chief executive announced earlier this year expansion plans into the Africa market, but did not give any timelines.

McDonald’s is seeking to enter Nairobi when competitors like Subway and Kentucky Fried Chicken (KFC) are stepping up their growth plans.

KFC made an entry into the East African market three years ago with five restaurants already operational and a sixth one set to open within a fortnight in Kenya.

The franchising contracts with global fast food chains are usually very capital intensive, with similar ventures like KFC’s latest store costing $1 million (Sh90 million) to set up.

READ: KFC opens Nairobi's first drive-through food outlet

Most of the food chains have picked popular addresses in Nairobi’s central business district or malls in leafy suburbs such as Westlands and Upper Hill.

The food chains invest heavily in market research before choosing to enter a new market, down to the details of identifying specific locations for the stores.

American fast food chain Domino’s Pizza, ice cream seller Cold Stone Creamery and South Africa-based Ocean Basket — a sea food diner —opened outlets attracted by a growing population of middle-income consumers.

The government in September released re-based GDP figures that moved Kenya to the club of middle-income nations.

Subway is located on Nairobi’s Kenyatta Avenue, Junction Mall and in the leafy Gigiri suburb that is mainly populated by international civil servants and diplomats.

The chain has plans to open two new branches at Thika Road Mall and in Timau Plaza on Argwings Khodek Road in the city.

Om Nom Nom — franchise holder for Domino’s Pizza and ColdStone Creamery — plans to open new Domino’s Pizza and Cold Stone Creamery outlets at the upcoming Garden City mall and in four different malls in Mombasa.

READ: US fast food, ice cream chains open in Nairobi

In May of last year, Burger King opened its first store in South Africa as it begins its expansion into Africa.

Frontier Strategy Group, a US data vendor that tracks emerging markets, mid this year ranked Kenya as the second most preferred destination in Africa for multinational corporations seeking to set up shop.

The attractiveness of any location around the globe to fast-food chains is often seen as an acknowledgement of the rise in the number of people with disposable incomes, a shift that investors in the outlets say has occurred in Kenya.